Week ending 21-Dec 14-Dec +/- ASPI 6, , % S&P SL20 3, , % Banking & Finance 16, ,

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1 (Turnover LKR Bn) ASPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Daily Turnover Hits 1-Month High Q3 18 GDP Growth Slows to 2.9% Y-o-Y ASPI.94% S&P SL2 1.31% The Bourse ended the week Cont. P2 Foreign investors closed the week... Cont. P3 Equity market sentiment. Cont. P4 Economic Snapshot P5 Indices vs. Turnover (17 th Dec 21 st Dec) 6,1 6,8 6,6 6,4 6,2 6, ASPI S&P SL2 17-Dec 18-Dec 19-Dec 2-Dec 21-Dec 17-Dec 18-Dec 19-Dec 2-Dec 21-Dec 3,2 3,18 3,16 3,14 3,12 3,1 S&P SL2 KEY STATISTICS Week ending 21-Dec 14-Dec +/- ASPI 6,5.65 6, % S&P SL2 3, , % Banking & Finance 16, , % Food & Beverage 24, , % Diversified 1, , % Hotel & Travel 2, , % Plantations % Manufacturing 2, , % Turnover (LKR Bn) % Foreign Buying (LKR Mn) 3, % Foreign Selling (LKR Mn) 6, , % Daily Average Turnover (LKR Bn) % Daily Average Foreign Buying (LKR Mn) % Daily Average Foreign Selling (LKR Mn) 1, % TOP 1 GAINERS TOP 1 LOSERS Code Opening Closing WoW % Change BLUE DIAMONDS[NV] BLUEX % S M B LEASING[NV] SEMBX % BLUE DIAMONDS BLUEN % LAKE HOUSE PRIN. LPRTN % MULLERS MULLN % TEA SMALLHOLDER TSMLN % RENUKA CITY HOT. RENUN % ON'ALLY ONALN % AGSTAR PLC AGSTN % SOFTLOGIC FIN CRL N % Code Opening Closing WoW % Change AMANA LIFE ATLLN % TESS AGRO[NV] TESSX % TESS AGRO TESSN % AMAYA LEISURE CONNN % DUNAMIS CAPITAL CSECN % E - CHANNELLING ECL N % LOTUS HYDRO HPFLN % ANILANA HOTELS ALHPN % CITRUS WASKADUWA CITWN % LMF LMF N % 1

2 ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review Indices The Bourse ended the week on a negative note as the ASPI decreased by 56.9 points (or -.94%) to close at 6,5.65 points, while the S&P SL2 Index also decreased by points (or -1.31%) to close at 3,18.18 points. Turnover & Market Capitalization JKH was the highest contributor to the week s turnover value, contributing LKR 3.87Bn or 45.75% of total turnover value. Softlogic Life followed suit, accounting for 25.92% of turnover (value of LKR 2.19Bn) while Sampath Bank contributed LKR 1.13Bn to account for 13.29% of the week s turnover. Total turnover value amounted to LKR 8.46Bn (cf. last week s value of LKR 3.14Bn), while daily average turnover value amounted to LKR 1.69Bn (+169.9% W-o-W) compared to last week s average of LKR.63Bn. Market capitalization meanwhile, decreased by -.94% W-o-W (or LKR 26.69Bn) to LKR 2,817.53Bn cf. LKR 2,844.22Bn last week. Liquidity (in Value Terms) The Banks, Finance & Insurance sector was the highest contributor to the week s total turnover value, accounting for 46.94% (or LKR 3.97Bn) of market turnover. Sector turnover was driven primarily Softlogic Life, Sampath Bank, NDB, Commercial Bank, HNB & Union Bank which accounted for 96.96% of the sector s total turnover. The Diversified sector meanwhile accounted for 46.54% (or LKR 3.94Bn) of the total turnover value, with turnover driven primarily by JKH & Richard Pieris which accounted for 99.46% of the sector turnover. The Beverage, Food & Tobacco sector was also amongst the top sectorial contributors, contributing 3.45% (or LKR.29Bn) to the market driven by Ceylon Tobacco which accounted for 87.71% of the sector turnover. Liquidity (in Volume Terms) The Banks, Finance & Insurance sector dominated the market in terms of share volume, accounting for 62.6% (or 95.63Mn shares) of total volume, with a value contribution of LKR 3.97Bn. The Diversified sector followed suit, adding 2.16% to total turnover volume as 31.7Mn shares were exchanged. The sector s volume accounted for LKR 3.94Bn of total market turnover value. The Telecom sector meanwhile, contributed 13.78Mn shares (or 8.94%), amounting to LKR.14Bn. Top Gainers & Losers Blue Diamonds[NV] was the week s highest price gainer; increasing 5.% W-o-W from LKR.2 to LKR.3 while SMB Leasing[NV] (+5.% W-o-W), Blue Diamonds (+2.% W-o-W) and Lake House Printing (+17.4% W-o-W) were also amongst the top gainers. Amana Life was the week s highest price loser; declining 22.9% W-o-W to close at LKR9.1 while Tess Agro[NV] (-2.% W-o-W), Tess Agro (-16.7% W-o-W), and Amaya Leisure (-11.7% W-o-W) were also amongst the top losers over the week. TOP 1 TURNOVERS Code Opening Closing Value (Rs. Mn) JKH JKH N , SOFTLOGIC LIFE AAICN , SAMPATH SAMPN ,125.9 NAT. DEV. BANK NDB N CEYLON TOBACCO CTC N DIALOG DIALN COMMERCIAL BANK COMBN HNB HNB N UNION BANK UBC N RICHARD PIERIS RICHN

3 LKR. Mn LKR. Mn ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review (Cont d) BROWNS INVSTMNTS L O L C HOLDINGS Net Foreign Purchases (14 Dec-21 Dec) Volume Change ('s) LB FINANCE JANASHAKTHI INS. HNB ASSURANCE EXPOLANKA TEEJAY LANKA HNB SAMPATH* RICHARD PIERIS* Net Foreign Sales (14 Dec-21 Dec) Volume Change ('s) UNION BANK PEOPLE'S INS TOKYO CEMENT LANKA IOC CHEVRON COMMERCIAL BANK CEYLON TEA BRKRS DISTILLERIES* DIALOG* JKH* (2,) (1,6) (1,2) (8) (4) - *Volume change of Richard Pieris (3.3Mn shares), Sampath Bank (.85Mn shares), JKH (2.4Mn shares), Dialog Axiata (7.2Mn shares) & Distilleries (1.6Mn shares) from 14 th Dec 21 st Dec not displayed. Foreign investors closed the week in a net selling position with total net outflow amounting to LKR 3.11Bn relative to last week s total net outflow of LKR.96Bn (-222.3% W-o-W). Total foreign purchases increased by 41.% W-o-W to LKR 3.4Bn from last week s value of LKR.69Bn, while total foreign sales amounted to LKR 6.5Bn relative to LKR 1.65Bn recorded last week (+296.7% W-o-W). In terms of volume, Richard Pieris & Sampath Bank led foreign purchases while JKH & Dialog Axiata led foreign sales. In terms of value, Sampath Bank & HNB led foreign purchases while JKH & Dialog led foreign sales. Net Foreign Purchases (By Transaction Value) Foreign Holding (%) Value* Net Change 21/12/18 14/12/18 (LKR. Mn) SAMPATH 22.92% 22.62% 845, HNB 35.6% 35.56% 168, RICHARD PIERIS 74.3% 73.87% 3,37, HNB ASSURANCE 1.92% 1.83% 46, TEEJAY LANKA 46.45% 46.43% 122, LB FINANCE 3.31% 3.29% 31, 3.79 L O L C HOLDINGS 5.16% 5.16% 24, JANASHAKTHI INS..77%.76% 32,32.94 NATIONS TRUST 24.95% 24.95% 6, VALLIBEL FINANCE 2.2% 2.1% 5,33.37 Net Foreign Sales (By Transaction Value) Foreign Holding (%) Value* Net Change 21/12/18 14/12/18 (LKR. Mn) JKH 48.51% 49.98% (2,394,392) (3,21.92) DIALOG 94.8% 94.17% (7,241,226) (72.41) COMMERCIAL BANK 33.3% 33.6% (246,484) (28.47) DISTILLERIES 1.66% 1.7% (1,634,563) (26.48) CHEVRON 22.15% 22.25% (235,189) (16.93) LANKA IOC 78.57% 78.6% (189,939) (4.65) CEYLON TEA BRKRS.9%.53% (8,) (2.32) CEYLON TOBACCO 97.45% 97.46% (1,) (1.42) RICH PIERIS EXP 1.13% 1.18% (5,666) (1.17) TOKYO CEMENT 21.32% 21.34% (45,377) (1.16) Note: *Value based on closing price and not on actual traded price 3, 2,4 Foreign Purchases Vs. Sales Foreign Purchases Foreign Sales -7 Week Ending Net Position of Foreign Holdings 1,8-1,4 1,2-2,1 6-2,8 17-Dec 18-Dec 19-Dec 2-Dec 21-Dec -3,5 3-Nov 7-Dec 14-Dec 21-Dec 3

4 ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Announcements for the Week Dividend Announcements DPS (Rs.) Type XD Date PEOPLE'S LEASING & FINANCE.75 Interim CENTRAL FINANCE 2. Interim Point of View Equity market sentiment remained largely negative this week despite the conclusion of the political deadlock that began on Oct 26 th, with investors remaining cautious in anticipation of new Cabinet appointees following the Supreme Court s ruling against the dissolution of Parliament last week. The broad-share Index fell ~57 points over the week as investors remained on the sidelines as Cabinet ministers and portfolios were announced and as news of a slower-than-anticipated GDP growth rate impacted sentiment. However, the ASPI remained above the psychological mark of 6 points, to close at point. Activity levels meanwhile improved considerably compared to last week, with an average daily turnover of Rs. 1.7Bn (cf. to Rs..6Bn last week), well above the YTD average of Rs..8Bn. Local institutions and HNIs accounted for ~57% of total market activity, with buying interest focused mainly on heavyweight JKH (66% of total crossings) while interest was also seen in the Banking sector (27% of crossings). Activity levels were further bolstered by strategic investment (19% stake) in Softlogic Life by LeapFrog Investments on Wednesday. Although foreign investors recorded purchases of Rs. 3.4Bn this week, foreign investors were net sellers for the week with a total net outflow of Rs. 3.1Bn, bringing the Colombo bourse s YTD foreign selling position to ~Rs.23.5Bn relative to net foreign purchases of 17.7Bn last year. Markets in the holiday-shortened week ahead are likely to look for cues from the direction the new cabinet will take and any further political developments. Q3 18 GDP Growth Slows to 2.9% Y-o-Y Sri Lanka s Q3 GDP growth dipped to a record 8-year low of 2.9% Y-o-Y (cf. 3.2% Y-o-Y in Q3 17 and 3.7% in Q2 18) which led to GDP growth for the cumulative 9M of 218 remaining marginally higher than that of the comparable period last year (3.3% Y-o-Y in 9M 18 cf. 3.2% Y-o-Y in 9M 17). The marginal expansion in 9M 18 was due to expansion in all three sectors as the Agricultural sector grew 4.3% Y-o-Y in 9M 18( cf. -3.5% in 9M 17) while Services sector growth rose to 4.4% Y-o-Y in 9M 18 (cf. 3.2% in 9M 17) and Industry Sector grew marginally 1.8% Y-o-Y in 9M 18 (cf. 4.8% in 9M 17). The Services sector recorded the highest growth (3.9% Y-o-Y) over Q3 18, with subsectors such as Telecommunication recording a notable 14.8% Y-o-Y growth (cf. 15.5% last year) and Financial services growing at 12.4% Y-o-Y. The Wholesale and retail trade subsector (which accounts for ~11% of GDP) meanwhile recorded a 5.% Y-o-Y growth while Other personal service activities (~1% of GDP) recorded 4.8% Y-o-Y growth. Meanwhile, declines in sub-sectors such as Transportation (-.7% Y-o-Y) and Public administration and defense (.5% Y-o-Y) partially offset the growth recorded by the rest of the Service sector. In the Agriculture sector meanwhile, Growing of Rice continued its recovery, with a notable 46.9% Y-o-Y growth over the period (cf. 32.8% Y-o-Y decline last year due to adverse weather conditions). The Industrial sector which accounts for 26.3% of total GDP meanwhile, grew marginally in Q3 18 (1.9% Y-o-Y growth cf. 5.3% Y-o-Y in Q3 17) as growth in Construction (2.5% Y-o-Y), Manufacture of F & B (3.7% Y-o-Y) and Manufacture of textiles (3.2% Y-o-Y) was offset by contraction in sub-sectors such as Manufacture of wood (-13.1% Y-o-Y) and Manufacture of furniture (5.% Y-o-Y). The CBSL indicated that growth is expected to remain below the predicted 4.% - 4.5% levels in 218. Source: Department of Census & Statistics 4

5 Exports /Imports (USD Mn) Total Arrivals T- Bill (6M ) Rate (%) Rs. Per kilo(unweighted) Rs /USD CCPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Economic Snapshot Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Interest Rates Prime Lending Rate Ave. Wtd. Deposit Rates Ave. Wtd. Fixed Dep. Rates CCPI Inflation Y-o-Y % (Base 213) Q3 18 GDP Growth (Base 21) 9.1% 3.4% 4.9% 4.8% 4.4% 3.1% 2.9% Source Central Bank Exchange Rate, Rs. vs. US$ Inflation (CCPI-N) YoY% Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec Jun-15 Feb-16 Oct-16 Jun-17 Feb-18 Oct-18 6 Month T-Bill Yield Tea s Dec-15 Jul-16 Feb-17 Sep-17 Apr-18 Nov-18 3 Dec-15 Sep-16 Jun-17 Mar-18 Dec-18 Source: Sri Lanka Tea Board Export & Trade Balance Trends in Tourist Arrivals Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Exports (LHS) Imports (LHS) Trade Balance (RHS) Trade Balance (USD Mn) 25, 2, 15, 1, 5, 8% 64% 48% 32% 16% % -16% Nov-15 Aug-16 May-17 Feb-18 Nov-18 Source: Sri Lanka Tourism Development Authority Y-o-Y Growth 5

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